How about just "/var/xdm"? Here's what I've been using:
DisplayManager.authDir: /var/xdm/authdir
Do your authfiles get put into /var/xdm/authdir/authdir/authfiles or
/var/xdm/authdir/authfiles (note 2 authdirs in first one)? My reading
of the man page and my experience trying a few permutations would
suggest the former. I think if this is the place for it that
DisplayManager.authDir: /var/xdm
(with files going into /var/xdm/authdir/authfiles) makes more sense.
Cheers,
Brook